Uber and Lyft said they will stop operating in Minneapolis after the city council voted to overrule the mayor's veto of a minimum wage law impacting rideshare drivers.
Lyft said it is "shutting down operations in Minneapolis" when the law takes effect on May 1. Uber said it will stop operating its transportation network in the entire metro area, including the airport, that same day.
The ordinance, which faced fierce pushback from the ride-share industry, establishes minimum driver pay of $1.40 per mile and $0.51 per minute, or a minimum of $5 per trip, whichever is greater. The city council's goal over the past 18 months has been to ensure that driver rates are equivalent to the local minimum wage, which rose to $15.57 per hour in January.
The city council voted 10-3 on Thursday to override the mayor's veto.
UBER, LYFT THREATEN TO LEAVE MINNEAPOLIS OVER CITY ORDINANCE
According to recent data from the Minnesota Department of Labor and Industry, median earnings for drivers in Minneapolis and St. Paul is $13.63.
Mayor Jacob Frey vetoed the vote over concerns that the companies would leave.
Council Member Jamal Osman, a co-author on the policy, said in a statement that the vote underscored how the city council would not let communities "be exploited for cheap labor."
"Drivers are human beings with families, and they deserve dignified minimum wages like all other workers," Osman said.
Critics of the bill argue that it would boost ride prices and force consumers to stop using the service.
THOUSANDS OF UBER, LYFT, DOORDASH DRIVERS TO STRIKE ON VALENTINE'S DAY TO DEMAND FAIR PAY
"This ordinance would make rides unaffordable for the majority of Minneapolis residents," Lyft said in a statement. "The drastic drop in rides means the thousands of drivers who rely on Lyft for earnings would ultimately make less, creating an unsustainable situation for our customers."
Lyft told FOX Business that it supports a minimum earning standard but that this ordinance is "deeply flawed" and "has been jammed through despite major concerns being raised by the community."
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Lyft CEO David Risher told FOX Business earlier this month that he believes central governments should stay out of the price-setting game.
Lyft said it will still advocate for a "statewide solution in Minnesota that balances the needs of riders and drivers and hope[s] to return to Minneapolis as soon as possible."
Uber told FOX Business that the move is "putting 10,000 people out of work and leaving many stranded."
"But we know that by working together with all stakeholders – drivers, riders and state leaders – we can achieve comprehensive statewide legislation that guarantees drivers a fair minimum wage, protects their independence and keeps rideshare affordable," the company said.
